Interest rates on bond issuance by credit institutions tend to increase - Photo: QUANG DINH
High capital demand leads banks to raise bond interest rates.
A report on bonds recently published by VPBank Securities indicates that the average issuance interest rate on bonds from real estate companies has decreased from a very high level in April 2024 (reaching 12%) to 10.95% in June of this year.
By July 2024, the market recorded a bond issue with a 0% interest rate from Da Nang Information Technology Park Development Joint Stock Company, totaling VND 500 billion with a 30-month maturity. The remaining bond issues still ranged from 9.8% to 12%.
Therefore, according to VPBank's estimates, the average rate will remain around 10% in July. In August, bond yields are expected to fluctuate at similar interest rates as the previous month.
In contrast to the downward trend in interest rates for real estate companies, VPBanks recorded a slight increase in interest rates for credit institutions, rising from an average of 5.7% to 6%. Additionally, interest rates on securities trading and commercial services also saw increases.
Explaining this, Mr. Duong Thien Chi - a securities analyst at VPBank - said that the interest rates on real estate bonds are fluctuating downwards with the expectation that difficulties in the bond market in general and the real estate sector in particular will be resolved.
"On the other hand, the issuance interest rates of credit institutions will continue to trend slightly upward in the coming period, due to the demand for medium and long-term capital as credit recovers," Mr. Chi commented.
Statistics also show that bond issuance recovered in August and remains significantly higher than in the first five months of the year. However, most of these are bonds issued by credit institutions.
Banks dominate the bond-issuing race.
Based on financial reports, as of the end of the second quarter, deposit balances at most banks increased at a slower rate than the same period last year, amidst very low deposit interest rates.
Some banks even saw a decrease in deposits compared to the beginning of the year, such as Vietcombank (-1.8%); PVcomBank (-1.44%), VietABank (-0.34%), TPBank (-2.5%), ABBank (-14.52%)…
Analysts believe that the low increase in deposits is partly due to people's tendency to withdraw money and shift it to other investment channels.
Since the beginning of the year, the investment market has witnessed significant price increases in gold, real estate, and stocks… Meanwhile, the average deposit interest rate of 4.8-5% per year is only slightly higher than the inflation rate.
Data: Financial Statements
According to VISRating data, in August 2024, the volume of new bond issuance increased to VND 57,700 billion, up from VND 46,800 billion in the previous month of July.
Of that amount, commercial banks issued a total of VND 51,300 billion, continuing to account for the majority of new issuances.
The VPBanks report also indicated that credit institutions continue to maintain the trend of repurchasing bonds before maturity, but there are signs of a decline.
In August, credit institutions repurchased bonds ahead of schedule worth 9,000 billion VND, a 69% decrease compared to the previous month, with coupon interest rates ranging from 3.8% to 8.1% (2-10 year maturities).
Not only in the primary market, but in August 2024, bonds issued by banking and real estate sectors accounted for over 90% of the trading volume in the secondary market, with the majority of transactions ranging from 1 to 3 years.
Source: https://tuoitre.vn/lai-suat-trai-phieu-ngan-hang-tang-lien-tuc-lai-suat-trai-phieu-bat-dong-san-hut-hoi-20240928123743241.htm
![[Photo] Prime Minister Pham Minh Chinh holds a phone call with the CEO of Russia's Rosatom Corporation.](/_next/image?url=https%3A%2F%2Fvphoto.vietnam.vn%2Fthumb%2F1200x675%2Fvietnam%2Fresource%2FIMAGE%2F2025%2F12%2F11%2F1765464552365_dsc-5295-jpg.webp&w=3840&q=75)
Comment (0)